The Impact Of "Camp To Increase" On The Registration Of International Freight Forwarding Companies

Since August 1, 2013, "camp changed to increase" has expanded nationwide.

Since then, a special industry -- international freight forwarding agency service industry has begun a journey of change.

What impact has the "camp to increase" brought to the international freight forwarding industry? How has the international freight forwarding business changed to increase over the past two years?

Dalian is an important port city in the whole country.

As of July 2015, there were nearly 2500 international freight forwarding companies registered in the city, and nearly 70% of them were owned by the IRS under the jurisdiction of Zhongshan District, Dalian.

This paper takes the collection and management data of the Bureau as a sample to observe the survival status of international freight forwarding industry.

After the promulgation of the Ministry of Finance and the State Administration of Taxation on the tax policy on the implementation of the pilot scheme for the pformation of value-added tax in the pportation industry and some modern service industries in the whole country (fiscal 2013 [37]), the "first generation" enterprises were greatly affected.

The first generation is collectively referred to by tax officials for "settling international pportation costs directly to international pport enterprises".

Because the upstream enterprises of such enterprises, namely, international pport enterprises (such as shipping companies), can not issue VAT invoices (zero tax rate), making enterprises unable to deduct input tax and have to pay full tax.

The monthly tax burden of the first generation enterprises increased from 0.42% to 2.82%. The increase in tax burden made it difficult for such enterprises to operate.

In December 2013, in order to solve the dilemma, the Ministry of Finance and the State Administration of Taxation issued the notice on putting the railway pportation and postal industry into the pilot scheme of business tax instead of VAT (fiscal 2013 [106]), so that the "first generation" enterprises could enjoy the policy of tax difference and tax exemption.

However, the "first generation" concept restricts the application of preferential policies.

In the international freight forwarding industry, business is multi level and multi chain. Only a small number of enterprises comply with the concept of "first generation" interpreted by the tax authorities. Most enterprises are "indirect agents" enterprises (hereinafter referred to as the "two generation" enterprises). They can not apply the differential tax levy and tax exemption conditions stipulated in Document No. 106. Originally, the burden of "first generation" enterprises has been shifted to the "two generation" enterprises.

After the implementation of Document No. 106, the monthly tax burden of the "first generation" enterprises decreased from 2.82% to 0.19%, while the average monthly income of the "two generation" enterprises

But from 0.54% to 2.3%.

The same predicament has been revived in the "two generation" enterprises, and the problem has not been completely solved.

In September 2014, the State Administration of Taxation issued the notice on the issue of value added tax on international freight forwarding services (State Administration of Taxation Announcement No. forty-second in 2014), stipulates that the indirect international freight forwarding business of the international freight forwarding industry enjoys tax exemption policy, and the tax burden in each link is zero.

This enables terminal shippers to benefit from it and no longer bear the burden of shifting taxes.

After the announcement of the 42 announcement, the average monthly tax burden of the indirect freight forwarding enterprises was 0.14%, 0.56% and 0.62% after the first generation, the two generation and the two generation respectively.

The positive effect of the policy has already appeared.

However,

More than a year after the formal implementation, the profits of many enterprises have slipped before the "camp changed to increase".

Reporters learned that the main reason lies in the international freight forwarding industry pricing and operation mode.

The price charged to the client includes all the logistics fees and agency fees from the place of issue to the destination, and a large part of the logistics cost is levied as a value-added tax because it does not belong to the tax-free scope. However, when the tax is pferred to the freight forwarding enterprises, it is unable to continue to pfer the value-added tax invoice because it enjoys the tax exemption policy, so it can only be borne by the freight forwarding enterprises themselves, and the cost will increase accordingly.